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McLawhorn v. Ocwen Loan Servicing LLC

United States District Court, D. South Carolina, Florence Division

February 15, 2017

Charles McLawhorn, Plaintiff,
v.
Ocwen Loan Servicing, LLC; and Altisource Residential Corporation, Defendants.

          ORDER

          R. Bryan Harwell United States District Judge.

         This matter is before the Court on motions for summary judgment filed by Defendants, Ocwen Loan Servicing, LLC and Altisource Residential Corporation [ECF Nos. 59 & 60]. For the reasons stated below, the Court grants in part and denies in part Ocwen Loan Servicing, LLC and Altisource Residential Corporation's joint motion for summary judgment [ECF No. 59] and denies Altisource Residential Corporation's motion for summary judgment [ECF No. 60].[1" name="FN1" id="FN1">1]

         Factual Background

         This case was removed to this Court from the Horry County Court of Common Pleas on July 7, 2014, on the basis of diversity jurisdiction, 28 U.S.C. § 1332. Plaintiff, Charles McLawhorn, alleged claims against Defendant Ocwen Loan Servicing, LLC ("Ocwen") and Defendant Altisource Residential Corporation ("Altisource Residential") for: 1) trespass; 2) violation of S.C. Code Ann. § 16-17-735; 3) negligence; and 4) violation of the South Carolina Unfair Trade Practices Act, SC Code Ann. § 39-5-10, et seq.

         Plaintiff is the owner of a parcel of real property located at 3405 Burris Street, North Myrtle Beach, South Carolina ("McLawhorn Property"). On or about August 31, 1999, Dorothea and James Estes executed a mortgage on 3507 Burris Street, North Myrtle Beach, South Carolina ("Estes Property"). Plaintiff has never held an ownership interest or been a party to any loan agreement, guaranty, or other agreement related to the Estes Property or Estes Mortgage and Dorothea and James Estes have never held an ownership interest in the McLawhorn Property. The McLawhorn Property was not encumbered by any mortgage at any time relevant to the complaint.

         Plaintiff alleges Ocwen entered into a long-term service agreement with Altisource Residential wherein Ocwen serviced mortgage loans held by Altisource Residential. Plaintiff alleges Ocwen purchased and/or serviced the Estes Mortgage. Plaintiff alleges that a title search obtained by Ocwen revealed that the Estes Mortgage was never recorded. Plaintiff further alleges Altisource Residential purchased the Estes Mortgage from Ocwen and/or performed asset management services on behalf of Ocwen with respect to the Estes Mortgage.

         Following Altisource Residential's alleged purchase of the Estes Mortgage, Plaintiff contends that Defendants, on one or more occasions, forced entry into the McLawhorn Property by breaking through the front door. Plaintiff alleges Defendants and/or their agents displayed notices and/or instruments throughout the McLawhorn Property, turned off the power supply, turned off the water supply, drained hot water tanks, maliciously damaged the front door of Plaintiff's home, changed the locks, and placed a lock box on Plaintiff's front door. Plaintiff alleges Defendants broke into Plaintiff's home even though they had knowledge that the McLawhorn Property was not encumbered by any mortgage, that the McLawhorn Property was never owned by the Estes family, that the Estes Mortgage was never recorded, and that the alleged forced entry was in violation of South Carolina's laws and regulations. Plaintiff alleges an employee/agent of Altisource Residential claimed that Ocwen hired Altisource Residential to perform work on the McLawhorn Property.

         Defendants respond that a mistake in the loan servicing documents led them to believe that the Estes mortgage, which went into foreclosure, was connected with 3405 Burris Street (McLawhorn Property) instead of 3507 Burris Street (Estes Property) and that they mistakenly entered the Plaintiff's property at 3405 Burris Street to winterize it thinking that it was the Estes Property.

         On July 1, 2016, Ocwen and Altisource Residential filed a joint motion for summary judgment [ECF No. 59] arguing that Defendants were entitled to summary judgment to the extent Plaintiff sought more than $200.00 in damages on his claims for trespass and negligence. Defendants also argue that they are entitled to summary judgment on Plaintiff's claims under S.C. Code Ann. § 16-17-735 (sham legal process) and the S.C. Unfair Trade Practices Act. Altisource Residential also filed a separate motion for summary judgment [ECF No. 60] arguing that Plaintiff sued the wrong defendant entity and that Altisource Residential is entitled to summary judgment as there is no genuine issue of material fact regarding its lack of involvement in this matter.

         Summary Judgment Standard

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) (2010). “A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record . . .; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1). When no genuine issue of any material fact exists, summary judgment is appropriate. See Shealy v. Winston, 929 F.2d 1009, 1011 (4th Cir. 1991). The facts and inferences to be drawn from the evidence must be viewed in the light most favorable to the non-moving party. Id. However, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

         "Once the moving party has met [its] burden, the nonmoving party must come forward with some evidence beyond the mere allegations contained in the pleadings to show that there is a genuine issue for trial." Baber v. Hospital Corp. of Am., 977 F.2d 872, 874-75 (4th Cir. 1992). The nonmoving party may not rely on beliefs, conjecture, unsupported speculation, or conclusory allegations to defeat a motion for summary judgment. See Baber, 977 F.2d at 875. Rather, the nonmoving party is required to submit evidence of specific facts by way of affidavits, depositions, interrogatories, or admissions to demonstrate the existence of a genuine and material factual issue for trial. Celotex Corp. v. Catrett, 17');">477 U.S. 317, 322 (1986).

         I. Altisource Residential's Motion for Summary Judgment [ECF No. 60]

         On July 1, 2016, Altisource Residential filed a motion for summary judgment arguing that Plaintiff named the wrong entity as defendant and that Altisource Residential had no connection to any of the allegations in Plaintiff's complaint. Altisource Residential maintains that Plaintiff should have named Altisource Solutions as defendant. On October 8, 2015, Altisource Residential filed Supplemental Answers to Local Rule 26.01 interrogatories, which stated:

Altisource Residential Corporation is improperly identified and is not a proper party to this litigation. Defendant separately informed Plaintiff that Altisource Residential Corporation is an improper party and has no documents or information regarding the claims set forth in the Complaint. In addition, Defendant informed Plaintiff that it believes Altisource Solutions, Inc. is the party Plaintiff intended to sue, and that counsel will accept service of an amended summons and pleading reflecting the correct identification.

[Supplemental Rule 26.01 Answers, ECF No. 32]. As indicated in Altisource Residential's Supplemental Answers, counsel for Altisource Residential was willing to consent to the out-of-time filing of an amended complaint reflecting Altisource Solutions as the proper party and accept ...


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